Classroom Companion: Business

particular, why standards commoditize technologies and services.
15.1 
 Why Standards?
Standards are necessary to ensure interoperability between users and providers, 
consistency of services, protection against abuse, and maintainability of quality. In 
the information and communication technology (ICT), standards are critical since 
the ICT infrastructure consists of different types of technical equipment produced 
by different manufacturers from different parts of the world (e.g., network compo-
nents, smartphones, and laptops). Lack of standards results in situations where 
international deployment of services is not possible.
The need for standards in ICT is also evident from 
.
Fig. 
15.1
 showing that 
five interfaces need to be standardized to provide interoperability:
Networks
Devices
Applications
Physical link
interoperability
Network to device
interoperability
Application to application
interoperability
Notation
Device to device
interoperability
Device to application
interoperability
2
1
3
4
5
2
1
3
4
5
. Fig. 15.1 Interfaces in the digital infrastructure. (Authors’ own figure)
 
Chapter 15 · Standards

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1. Application protocols between software modules (e.g., http between browsers 
and webpages, streaming protocols, and e-mail protocols)
2. Application programming interfaces (APIs) for programming, downloading, 
and program execution and runtime management
3. Transport protocols (e.g., UDP/TCP/SCTP and the encryption protocol 
Transport Layer Security (TLS))
4. Access protocols (e.g., Ethernet, Wi-Fi, and 4G)
5. Internet protocols (e.g., IPv6 and the encryption protocol IPsec)
That these standards are strictly followed is particularly important for the develop-
ment and sales of digital goods and services designed for the global marketplace. 
Standards are needed for several reasons:
5
Standards are the tool by which worldwide ICT markets can be created, where 
the foremost prerequisite is that the devices at each end of the connection are 
capable of communicating irrespective of where they are located and to which 
ISP they are connected.
5
Standards are required for creating competitive markets, for example, for end 
user equipment. This includes procedures for how to connect devices to the 
network, how different types of equipment (e.g., laptops and smartphones) can 
interoperate, and how to locate and identify remote equipment.
5
Standards enable cooperation between stakeholders responsible for performing 
different tasks in the execution of certain services, for example, banking ser-
vices where financial institutions may cooperate with third party service 
providers for trusted customer identification (e.g., ID.me), authentication (e.g., 
mobile operators), card verification (card issuers), and transaction managers 
(e.g., point of sale operators). This requires not only technical standards but 
also legal, economical, and managerial ones.
5
Standards for distributed processing are required to allow computers to coop-
erate in performing a common task where the various elements of the service 
are executed at different computers at remote locations. This category includes 
concepts such as cloud computing and grid computing. Examples are the Inter-
net itself, massively multiplayer online games, air traffic control centers, and 
large scientific simulation models requiring interconnection of thousands of 
computers in a grid to become massive supercomputers.
International ICT standards ensure interoperability between users globally. These 
are standards related to telecommunications networks (e.g., the Internet protocol 
stack and the family of mobile network standards developed by 3GPP), presenta-
tion formats (e.g., HTML), and Internet naming and addressing formats and usage 
(e.g., URL and URI). These standards are not subject to legal agreements between 
countries; that is, they are not de jure standards. On the contrary, the ICT stan-
dards are de facto standards developed by manufacturers, universities, voluntary 
groups, or individuals to support the international ICT infrastructure. If the pro-
posal is valuable, it may be taken into use and thereby becoming an international 
standard. The World Wide Web is the most evident example, starting as a project 
to facilitate communications between CERN (the particle physics laboratory out-